Carmaker is set to adopt a new governance structure to avoid power being concentrated in the hands of a single executive
Former Nissan chair Carlos Ghosn sits inside a car as he leaves his lawyer’s office after being released on bail from Tokyo Detention House, in Tokyo, Japan, on March 6 2019. Picture: REUTERS/ISSEI KATO
“Nissan didn’t have any committees whatsoever, it was just Carlos Ghosn deciding it,” said Zuhair Khan, an analyst at Jefferies in Tokyo. “There needs to be a clear feeling that what is done is correct, and it has to be evaluated by people who have no conflict of interest.” Once Nissan’s board accepts the measures, it will have a governance structure that calls for decision-making based on consensus instead of the whim of one person. Among the panel’s proposals may be a recommendation to create separate governance committees to oversee nomination, audit and remuneration, with the majority of each body made up by independent directors, a person with knowledge of the proposals has said.
While the biggest source of tension — the ownership imbalance — remains, it is solvable, said Motoki Yanase, an analyst at Moody’s Investors Service in Japan. Renault now has 43% in Nissan, which owns 15% of the French company. The French government is Renault’s most powerful shareholder. The alliance was formed in 1999 after Renault agreed to salvage struggling Nissan, acquiring a major stake in the Japanese company in the process. More recently, Nissan’s growth has outpaced that of Renault, resulting in calls from within the Japanese company for a more balanced partnership structure. Mitsubishi joined in 2016. Put together, the alliance sold 10.8-million cars in 2018, an eighth of total global auto sales.
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